GPB/JPY And EUR/JPY Daily Outlook: June 16, 2012

Daily Pivots: (S1) 122.76; (P) 123.51; (R1) 123.96

GBP/JPY is staying in tight range below 124.34 and intraday bias remains neutral. Focus is on 121.90 minor support. Break there will indicate that corrective rise from 118.82 is finished. In such case, bias will be flipped back to the downside for and send GBP/JPY through 118.82 to 116.83/117.29 support zone. However, on the upside, break of 124.64 should bring stronger rally to 127.10 support turned resistance instead.

In the bigger picture, the corrective structure of the rebound from 116.83 to 133.48 indicates that down trend from 2007 high of 251.09 is not finished yet. Break of 116.83 will resume such downtrend and target 110 psychological level first. Break will pave the way to the more important 100 level and possibly below. On the upside, however, above 127.01 will firstly indicate that fall from 133.48 is finished. Further, break of 133.48 should then confirm medium-term reversal.
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EUR/JPY Daily Outlook

Daily Pivots: (S1) 99.35; (P) 99.72; (R1) 100.16

EUR/JPY is stuck in consolidative trading in tight range and intraday bias remains neutral. Focus remains on 98.53 minor support. Break there will indicate that correction from 95.64 is already completed and should flip bias back to the downside to send EUR/JPY below 95.64. Meanwhile, above 100.90 will extend such corrective rise to 61.8% retracement of 108.00 to 95.64 at 103.27 and possibly above.

In the bigger picture, the larger down trend from 2008 high of 169.96 is still in progress and could extend further lower towards 90 psychological level. However, as we're favoring the case that pattern from 139.21 is a falling wedge with bullish convergence condition in weekly MACD. Fall from 111.43 should be the last leg in such pattern. Hence, we'll expect strong support above 88.96 to contain downside, form a major bottom and bring reversal. So, focus will be on reversal signal in case of another decline. Meanwhile, break of 104.61 will be the first signal of reversal while further break of 111.43 should confirm.
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